pluses and minuses
expected in next county budget
County Executive Chris Coons goes before County Council in March
to propose a budget for the coming fiscal year, his message will
have a couple of proverbial good news-bad news scenarios.
It's a safe bet
that he won't seek another increase in the property-tax rate.
Even if it were not an election year -- terms of six of the 13
members of Council expire this year and Coons himself faces a
titanic battle with implications far beyond Delaware when he
goes up against Congressman Mike Castle vying to fill the
remaining four years of Vice President Joe Biden's term in the
U.S. Senate -- there almost certainly would not be the political
will to impose a fourth increase in five years. One for next
year would follow a 25% hike this year, 17.5% in fiscal 2008,
and 5%, then the statutory limit, in fiscal 2007.
of some additional tax revenue, it will be difficult to maintain
the current level of public services, especially considering
that the county workforce already is stretched thin to cover
vacancies in the authorized ranks. Then, too, there's the matter
of whether to continue the pay cuts imposed on employees this
fiscal year. While there was no specific 'sunset' provision in
any of the legislation enacted to effect the cuts, they were
labeled temporary, which was widely believed to mean the former
pay scales would be restored after a year.
In a broader
context, some of dark clouds of the so-called Great Recession
show signs of parting. New Castle County is expected to soon
begin sharing in an economic recovery which appears to be slowly
gaining momentum. Fisker Motors' reopening of the General Motors
plant, possible sale of the Valero refinery and the expansion of
Aberdeen Proving Ground in nearby Maryland all bode well for a
larger and firmer tax base. Shorter term, the county's
Financial Advisory Council was told at its recent meeting that
the real estate transfer tax appears to be, at least,
stabilizing and, when combined with higher fees, has inspired a $1.5
million upward adjustment in projected fiscal 2010 revenue. The
gain is slightly less than 1% over the $154 million anticipated
when the budget was adopted last May.
The same forecast, however,
looks for an $11.8 million deficit in the general fund budget
for fiscal 2011 on top of $2.8 million this year. Because state
and local budgets are required by law to be balanced, that requires dipping into the non-emergency reserve to finance
the shortfalls. The reserve is now expected to be gone early into
the fiscal year which begins in July, 2012. Absent any
significant structural change in the county revenue stream and
only conservative increases in spending, the shortfall would
grow to $95.7 million over the next five years.
transfer tax currently is running at a pace which would put it
$1 million ahead of budget, Russ Morris, of the county finance
department, told the advisory council that mostly reflects
completion of four large transactions. Similarly, he added, one
major project, proposed development of Barley Mill Plaza, was
responsible for most of a significant increase in fee revenue.
On the spending side of the ledger, he said, the lower cost of
utilities and gasoline, along with savings as a result of a 10%
reduction in the workforce, are driving spending down $2.4
million under budget.
perceived improvement in General Fund revenue, Morris reported,
is a projected $2.2 million drop in fees for sanitary sewer
service as a result of lower water consumption. With a $1.9
million shortfall expected in the sewer fund this year and $3.2
million next, its reserve would be exhausted during fiscal 2012
if nothing is done to reverse that situation. Fees account for
about 85% of sewer fund revenue.
Although they won't
receive Coons's budget proposal until Mar. 16 and not get into
department-by-department details until a round of budget
hearings, County Council members at their finance committee
meeting on Feb. 23 talked in a somber vein about the fiscal
situation. The discussion was inspired by Timothy Sheldon's
recounting a chance conversation during a recent personal trip
with a county councilman in Florida. His counterpart, Sheldon
said, was amazed at the limitations within which county
governments operate in Delaware. Facetiously or not, he
suggested simply letting the money run out with the assurance
that state government would thus be forced to come to the
rescue, Sheldon said.
While no one at the
meeting here advocated following that advice, there was a
general consensus that the General Assembly either does not
recognize the seriousness of the situation in New Castle County
or is unwilling to grant some relief in ways that would have
little or no impact on state revenue, which admittedly also is
falling short as a result of the ailing national and local
members were especially critical of state representatives and
senators whose New Castle constituencies are the same people the
County Council members represent. Many, if not most, residents
are unable to differentiate between "what we can do and what we
can't do" under state law, George Smiley said.
In particular, John
Cartier said, the county should be allowed to take the same cut
from the state hotel tax which the city of Wilmington receives.
Similarly, it was said, the Delaware counties should be able to
share the revenue from casino gambling, which presently is
limited to one venue in each of the three counties -- Delaware
Park, Dover Downs and Harrington Raceway.
On the other hand,
it appears that a state constitutional amendment now in process
will transfer from county to state jurisdiction two
revenue-generating offices -- recorder of deeds and register of
wills. County government was required this year to take
responsibility for and pay for dog control. Presently at risk is
the amount of state reimbursement for paramedic services.
Chief of staff
Nicole Majeski told the meeting that the Coons administration is
continuing to press for the revenue diversification is has been
seeking since coming into office five years ago. However, she
said, "the response we are getting from Dover this session is
that they're not interested in raising taxes or fees." She
indicated that holds irrespective of which level of government
levies or collects them.